2024 (1) TMI 252 - AT - Service Tax

Classification of services - Erection Commissioning and Installation Service or construction service - Refund of tax paid - tax paid under mistake of law - applicability of provisions of section 11B of CEA. Classification of services - HELD THAT - The Commercial or Industrial Construction Service includes within its scope construction of a new building or a civil structure or a part thereof. Construction of rooms for educational institutions would ordinarily be covered under the description of construction of new building or a civil structure or a part thereof. In that sense, ordinarily Erection, Commissioning or Installation of rooms would fall under the category of construction of new building or a civil structure or part thereof. The said activity would become taxable only if the same is provided for use for Commerce or Industries - In the instant case, there is no dispute that the said rooms were not used for commerce/ industry and therefore, the appellant s service could not be classified under the head of Commerce or Industrial Construction Service. In view of above, it is clear that the tax has been paid wrongly. Applicability of provisions of Section 11B to the refund claim - HELD THAT - Unless tax has been collected under a provision which has been held to be unconstitutional in the appellant s own case all refunds would be covered by Section 11B of the Central Excise Act or Section 27 of the Customs Act, 1962 - the provisions of unjust enrichment as provided under Section 11B become applicable to the case. The appeal filed by the Revenue as well as the appeal filed by the Sintex BAPL Limited are dismissed.

Summary

Issues Involved:
1. Whether the service provided by SBL is chargeable to service tax.
2. Whether the provisions of Section 11B are applicable if it is held that no service tax was chargeable.

Summary:

Issue 1: Chargeability to Service Tax
The primary issue is whether the services provided by M/s Sintex BAPL Ltd (SBL) are chargeable to service tax. SBL argued that they provided construction services to government and semi-government organizations involved in education and health services, which are non-commercial in nature, and thus, no service tax was payable. The Commissioner (Appeals) supported SBL's stance, stating that services provided to educational institutes and government bodies are non-commercial and not intended for commerce or industry, and therefore, not taxable. However, the Tribunal disagreed, stating that the exemption for non-commercial services applies specifically to "Commercial or Industrial Construction Service" and not to all services provided to government or non-commercial agencies. The Tribunal concluded that the construction of rooms for educational institutions does not fall under "Erection, Commissioning or Installation Service" but under "Commercial or Industrial Construction Service," and since the rooms were not used for commerce or industry, the tax was wrongly paid.

Issue 2: Applicability of Section 11B
The second issue pertains to the applicability of Section 11B of the Central Excise Act, 1944, concerning the refund claim. SBL argued that the tax was paid under a mistake of law, and thus, Section 11B should not apply. They cited various case laws to support their claim. However, the Revenue relied on the Supreme Court's decision in Mafatlal Industries Limited, which emphasized that all refund claims must be filed and adjudicated under the respective enactments unless the tax was collected under a provision held unconstitutional in the appellant's own case. The Tribunal concluded that the provisions of unjust enrichment under Section 11B are applicable, and since SBL could not establish that they had not passed on the tax burden, the refund claim was not justified.

Conclusion:
Both the appeals filed by the Revenue and SBL were dismissed. The Tribunal held that the services provided by SBL were not exempt from service tax, and the refund claim was subject to the provisions of Section 11B, including the doctrine of unjust enrichment.